The average college loan interest rate varies depending on whether the loan is federal or private, and on the type of federal loan.
Federal Student Loan Rates for 2024-2025 Academic Year
- Undergraduate Direct Subsidized and Unsubsidized Loans: 6.53% fixed interest rate
- Graduate or Professional Direct Unsubsidized Loans: 8.08% fixed interest rate
- Direct PLUS Loans (for parents and graduate/professional students): 9.08% fixed interest rate
These federal rates are fixed for the life of the loan and are the highest in over a decade, reflecting recent increases
Private Student Loan Rates
- Private loan interest rates vary widely based on creditworthiness and lender, ranging approximately from 3.5% to 17%.
- Private loans can have fixed or variable rates; variable rates may start lower but can increase over time.
- Average private undergraduate loan rates are around 10.09%, and graduate private loans average about 9.92%, but individual rates depend heavily on credit scores and cosigners
Summary
Loan Type| Interest Rate (2024-25)| Notes
---|---|---
Federal Undergraduate (Subsidized & Unsubsidized)| 6.53% fixed| Government
pays interest on subsidized loans while in school
Federal Graduate/Professional| 8.08% fixed|
Federal PLUS (Parents/Grad)| 9.08% fixed|
Private Loans| 3.5% to 17% (varies)| Depends on credit, lender, fixed/variable
Federal loans generally offer lower rates and borrower protections compared to private loans, which have more variable rates based on credit
. In conclusion, the average college loan interest rate for federal loans is about 6.53% for undergraduates and higher for graduate and PLUS loans, while private loan rates vary widely but average around 10% for undergraduates.
